An intelligent approach to selling virtual intelligence is paying off

Computer technology for intelligent or virtual agents — think iPhone’s Siri — is beginning to replace call centres and Toronto-based IntelliResponse was early to the space. Founded in 2000 by students from the University of Waterloo, IntelliResponse, which has patented its virtual agent technology, initially focused on solving problems for students. But it was in 2008 when David Lloyd took over as CEO that the struggling startup began to see significant growth. It now has more than 150 clients and was recently named to Deloitte’s Fast 50 and Fast 500 lists of the fastest growing tech companies in Canada and North America, respectively. Here Mr. Lloyd shares his strategy and vision. Below is an edited version of that conversation.

Q What can IntelliResponse virtual agents do? Why do you think the technology is taking off?

A Our virtual agent technology platform answers customer questions at a level that meets or exceeds what a live agent can do on the web and across channels. Our virtual agents have the ability to learn what they don’t know and provide answers based on an engine that matches questions to criteria to arrive at the one right answer.

Every major bank uses our technology in their web and mobile environments. We also have a product called Offers that lets people ask a question about travel, for example, and it will answer the question and provide offers based on the intent of the question. Our Voices product takes the conversations and helps customers visualize them by organizing them into themes.

A major study in the U.S. revealed that 89% of consumers expect an efficient experience from the Web environment. Another [showed] that 57% of people who end up on a call centre start on the Web. The world is mobile first and the self-service experience is important. Our virtual agents solve problems and answer consumer questions on the web. We also help organizations understand those conversations and monetize them as they relate to what customers need next.

Q You set an expanded strategy during the recession, what was your initial plan? How did you start attracting customers? How has that plan evolved?

A Up until 2008 most of our growth had been in the education space. McMaster University, Stanford, York, Western, George Brown were all clients. We had grown organically, incrementally but that market was not going to provide great growth.

I understood we were relevant to businesses looking to enable self service from an operational efficiency point of view. We had no venture backing.

As an executive team we looked hard at markets we were successful in and other markets that were growing. We had already had an early win in financial services and targeted our focus to banks. There was no material change to the solution, what changed was the messaging and being clear about how we were enabling their business. We were very deliberate in how we communicated the value proposition because if you’re not enabling their business to drive efficiency or revenue than you are vulnerable.

Enbridge was an early customer and we used that foothold to go after Union Gas, Nova Scotia Hydro, New Brunswick Power, BC Hydro, Progress Energy, Vista Utilities and most recently Duke Energy. We did a good job of taking success in a specific vertical and replicating it because we understood the characteristics of each vertical and what makes us relevant in the segment.

For example, utilities engage in referential buying and their customer base is static. In financial services, the characteristics are more dynamic because it’s a more competitive space and banks are looking to convert consumers to their services. They’re all looking to differentiate. We placed specific bets and were deliberate in why we chose them.

Q What has your growth trajectory been like in terms of employees? Revenue?

A Between 2008 and 2013, we grew from 16 to 62 employees. We’ve also grown revenue more than 166%.

Q What challenges has rapid growth posed? How did you meet them?

A In a number of ways, the biggest challenge with growth is not losing what brought you success initially and learning what will work going forward. We realized the solution our customers use today is still important and that this is a young, early market. It was necessary to extend it with our Voices and Offers products because we were seeing our customers’ need to interact with consumers differently and to understand what the consumer is trying to do. We balance listening to the customer looking forward to what we believe the customer will need and marry them to create one of the most complete products in the market.

Q Who are your competitors?

A They are the virtual agent market — companies that provide intelligent solutions that understand human interaction. They are similar but whereas they tend to be service heavy, we are the opposite in that we have invested in technology and software to deliver the one right answer, not what could be the answer. That has helped us differentiate the product. We allow customers to develop new revenue streams. We also tend to have a smaller team but more than twice the number of customers our next three competitors have combined, which means our business scales.

Q How do you grow from here?

A We have customers in the U.K., the U.S., Australia and soon Singapore. We made the push to grow beyond Canada early and we took the same disciplined approach that drives our vertical strategy and focus on industries where we have success in new geographic markets. When you see tens of millions of questions from banking consumers every year and share that knowledge, it’s powerful.

We are still very early, the industry is developing and there is massive opportunity domestically and internationally. We have an excellent foundation to grow faster and further in the U.S., Australia, Asia and Europe. We are bullish about the next five years and think we can trump the growth we’ve had in the past five years. Last year, we answered about 120 million questions. I’d love to answer half a billion questions in 2018. It’s a good stretch goal.